The do’s and don’ts of buying a commercial property

By LegalMatters Staff • Business owners or investors who are thinking about buying commercial property in Edmonton need to do their homework before making a purchase. It is also a good idea to consult with a lawyer who specializes in that field.

“Due diligence is essential when purchasing a commercial property,” says Edmonton real estate lawyer Peter Ewanchuk. “That includes having a lawyer identify and resolve legal issues involved in the sale. As a prospective buyer, you want to know about these issues or you could face costly and unexpected expenses down the road.”

He explains commercial real estate is property or buildings from which a company can operate a business, including malls, grocery stores, offices and industrial estates.

“Commercial units are comparatively more expensive than residential properties due to their location, size and potential to generate income,” says Ewanchuk. “And the laws governing the sale and purchase of commercial properties vary significantly from residential buildings.”

For example, commercial buildings are subject to environmental regulations and different building codes than residential units, he says.

“No two commercial property purchases are the same in their detail or complexity, but here are some common issues a real estate lawyer can help you with,” says Ewanchuk. “They include finding out if there is a lien on the property, does your projected use of the building meet the zoning requirements and is the purchase agreement properly structured.”

He adds that commercial property purchase will entail a great deal of paperwork, including the purchase agreement.

“This document should clearly state the terms and conditions of the transaction, including details about the property, the purchase price, closing date and all other relevant information,” says Ewanchuk.